MONEY DOESN'T TALK, IT SWEARS...

This occasional blog focuses on 1) The corporations and entrepreuners who influence US foreign policy and then make money from its implementation; 2) The politics and economics of the Pacific Rim; 3) The state of the US and global labor movement (or what's left of it); 4) What's happening in Korea and Japan from the perspective of someone who was raised in Tokyo and Seoul during the height of the Cold War; and 5) Music and culture. The title comes from a Bob Dylan song.

Monday, April 23, 2007

Welcome

Hello. I am no longer posting on this blog. Please go to www.timshorrock.com to keep up on my latest writings and postings on US foreign policy, national security, music and politics. And thanks for stopping by.

Backlash over US role in Korean Strike-Breaking

Note: This article was published in 1999 during the height of the Asian financial crisis.

By Tim Shorrock, IPS, 20 April 1999

WASHINGTON, Apr 20 (IPS)—A strike by thousands of transport and industrial workers in South Korea this week is mainly in protest at mass layoffs that form part of reforms demanded by the International Monetary Fund (IMF).

But the unions also are angry at the crackdown on the Korean labour movement by the government of former dissident Kim Dae Jung and the arrest, during the past year, of trade union leaders suspected of leading illegal strikes.

Many of those arrests took place at the bankrupt Halla Group where restructuring and down sizing has been organized by Rothschild Inc.—a Wall Street investment bank that, ironically, also is a major custodian of retirement money earned by U.S. workers.

Adding insult to injury, the biggest investor in Rothschild’s Asia Recovery Fund is the California Public Employees’ Retirement System. Better known as Calpers, that fund is the largest public pension fund in the United States.

It is is run by a 13-member board of trustees that includes four U.S. union officials and therein lies an interesting tale of finance, politics and strange bedfellows.

The latest industrial action in South Korea began Monday when Seoul’s 9,000 subway workers walked off the job. More than 20,000 workers from 35 unions, most of them linked to the militant Korea Confederation of Trade Unions (KCTU), then staged sympathy strikes in support of the subway workers.

On Tuesday, workers at Daewoo Heavy Industries, one of the country’s largest shipyards, downed tools to protest Daewoo’s decision to sell the yard to Mitsui of Japan as part of its plan to scale down its assets and reduce debt.

The industrial action will culminate in a mass strike scheduled for April 26 and nation-wide mass rallies on May 1.

The campaign is aimed at forcing a change in the overall orientation of the government’s restructuring policy, a KCTU statement said.

The ill-advised policy—perhaps aimed at appeasing the Wall Street neo-liberal zealots—was, last year, responsible for the dismissal of some 400,000 workers and the collapse of the domestic economy as a whole.

That’s where Halla, the largest of South Korea’s chaebol to go bankrupt, enters the story.

When Halla went under, Wilbur Ross, a partner at Rothschild, sensed an opportunity. After going over Halla’s finances, he agreed to extend bridge loans that eventually reached over 1 billion dollars to help the chaebol restructure its assets and debts.

One of Halla’s most prized assets is Mando Machinery, Korea’s largest manufacturer of car parts and a big supplier to General Motors, Ford and other US-based multinationals.

Last summer, Rothschild ran into fierce labor opposition when thousands of workers organized a sit-down strike to protest Mando’s plans to fire one-fourth of the workforce.

Two weeks into the occupation, Ross faxed a letter to Mando’s CEO warning the strike was making his investors nervous. I simply made it obvious to the company that, if the unrest continued, it would make Mando financially non-viable, Ross told IPS.

The threat worked: a few days later, 10,000 riot policemen armed with clubs, pepper fog, tear gas and water cannons stormed Mando’s seven factories and arrested 1,800 workers; later 25 leaders of Mando’s trade union went to prison.

But the lay-off were completed and the remaining Mando workers went back to their jobs.

Rothschild’s parent company, Rothschild Assets Management, handles billions of dollars of investments for several U.S. pension funds, including the Joint Industry Board of the Electrical Industry and the International Brotherhood of Electrical Workers and public retirement funds in Baltimore and the states of Maryland, New Mexico and Vermont.

Last month, the union connection deepened Calpers’ board voted unanimously to invest another 100 million dollars in Rothschild’s Asian fund, raising its stake to 150 million dollars.

The new Asian venture presents valuable investment opportunities to purchase securities at historically low prices, declared Charles P. Valdes, chairman of Calpers’ investment committee. He also is a member of the International Executive Board of the Service Employees International Union, one of the most aggressive unions in the U.S. labor movement.

The investment has made Calpers and—indirectly, thousands of state workers from California to Maryland—partner in an action that left scores of Korean workers in jail and hundreds without jobs.

Adding to the irony is the fact that Calpers, a recognized leader in the world of socially-responsible investing, has won strong praise from the AFL-CIO for using its clout to influence U.S. corporations that have run afoul of U.S. unions.

In this case, Calpers’ labor trustees were caught flat-footed. We didn’t know anything about it, said a union official when asked about the Mando incident. But we’re concerned about this sort of thing and want to get a better handle on it.

A consultant who advises union pension trustees said the Halla story should serve as a wake-up call for unions. People don’t feel comfortable dealing with entities when the right arm is making profits from their pension fund and the left arm is engaged in these kinds of practices, he said.

Rothschild’s Ross rejects those arguments.

The purpose of our fund is to make an investment return for its beneficiaries; it’s not an ideological instrument, he said. Ross defended the layoffs at Mando Machinery, a major supplier to GM and Ford, saying: Korean companies have too many workers.

For unions, Calpers’ investment in Rothschild begs the question of international labour solidarity.

What happened at Mando is repeating itself as Asian workers continue to resist pressure to slash payrolls and throughout Asia, much of the restructuring is being organized by Wall Street banks that, like Rothschild, handle billions of dollars in U.S. pension funds.

Major players in the restructuring process in Thailand, Indonesia, South Korea and Japan include such financial behemoths as Morgan Stanley Dean Witter, GE Capital, J.P. Morgan, Lehman Brothers and Goldman Sachs.

Thursday, July 06, 2006

Cornyn, George Wallace and Me

Before it dies on the (internet) vine, I thought I'd post this piece I wrote about the junior Senator from Texas, John Cornyn, who was a classmate of mine at the American School in Japan during the 1960s. This ran in The Texas Observer (Afterword 6/7/02).

Cornyn, George Wallace and Me

BY TIM SHORROCK

I read a couple of weeks ago that John Cornyn had pledged to keep the issue of race out of his upcoming U.S. Senate campaign against African-American Democratic nominee Ron Kirk. That was a relief, because the John Cornyn I knew in high school was a big supporter of George Wallace and seemed oblivious to the dangers of Wallace’s racial demagoguery.

Cornyn a Wallace supporter? Why hasn’t Texas heard about that before? Cornyn and I graduated in 1969 from the American School in Japan, and I guess word of his early dabbling in right-wing politics never reached these shores. Besides, statements like this are not something I’d want to broadcast if I was trying to step into Phil Gramm’s shoes and join George Bush’s team in Washington.

"With the continuing concentration of power in the hands of the inept Democratic and Republican parties, it is time for a change," Cornyn wrote in our student newspaper just before the 1968 presidential election. "Cast your vote for a strong America. Vote for George C. Wallace on November 5."

Before going on, I have to confess: If Cornyn was the conservative in our class, I was the class radical. While he supported Wallace and backed the war in Vietnam, I was for McCarthy and vehemently opposed the war. We were polar opposites politically, but managed to become friends. I’m sure he remembers the time we got trapped in downtown Tokyo during a huge antiwar demonstration that shut down the city’s rail system, and I helped him find his way home.

We came to our politics from very different backgrounds. Cornyn was the son of an Air Force officer who was stationed for two years at the sprawling U.S. air base at Tachikawa. I was one of five children of missionary-educators, and had lived in Tokyo most of my life. My dad was an outspoken critic of the war and was a key organizer of a May 1968 rally near the U.S. Embassy, where 100 American missionaries, college students, and professors called for an end to U.S. bombing and a negotiated peace in Vietnam.

My presence at that march infuriated a lot of my fellow students, who were roughly divided between children of missionaries, business executives, diplomats, and CIA officers. It was a pretty conservative crowd–but slightly left of Cornyn, who had to shrug off laughs, quizzical looks, and worse whenever he stuck up for Wallace. (One of his pro-Wallace speeches was "well presented and convincing, despite the distraction of a few hecklers in the audience," our paper reported).

To be fair, blocking doors to prevent integration wasn’t on Cornyn’s list of reasons to vote for Wallace. But he was big on states’ rights. "With the Supreme Court’s recent rulings and increased federal legislation, the government has become increasingly dictatorial and oppressive while the state and local governments have become more weak," he wrote. Here he is on law and order: "Mr. Wallace is convinced that no innocent man should be punished… [But] many criminals never receive the punishment due them because they have clever lawyers, or the case takes so long to go through the slow court schedules and lengthy appeals cases." On the urban crisis: "The existence of poverty has been fact since the beginning of mankind. Statistics show us that it is not the poor element that riots and rebels, but others who hold complete disrespect for property and the rights of others (socialists?)" And, finally, on Vietnam: "It only seems reasonable that a cure (victory) for this Asian illness is most desirable even if the measures necessary are drastic."

Cornyn didn’t win many converts: The final count in our mock presidential election was Humphrey, 250; Nixon, 225; and Wallace, 22. None of those votes were mine, because I boycotted the election out of disgust with Humphrey’s refusal to break with LBJ over the war. So, in a sense, both Cornyn and I were outsiders. We just came from different sides of the fence.

The last time we saw each other was on graduation day. "Good luck among your fellow left-wingers at Earlham," he wrote in my yearbook, referring to the Quaker college I attended in Indiana. "Just don’t burn down too many buildings and put up too many red flags." Well, I didn’t, but I never abandoned my core beliefs. To his credit, Cornyn stuck to his guns as well. For the good of the country, let’s hope he sticks to Texas, too.

Tim Shorrock is a freelance journalist based in Washington, D.C., where he writes for The Nation and other publications. He lived in Japan from 1952 to 1959 and 1963 to 1969. He can be reached at tshorrock51@hotmail.com.

I grew up in Japan in the years immediately after the US occupation. There's some similarities, and a lot of differences, between what happened in Japan from 1945 to 1953 and what has occured in Iraq since the US invasion of 2003. In 2002, just before Bush ordered US forces into Iraq, I published a long article about the role of US missionaries in occupied Japan in Killing the Buddha, an eclectic web magazine about religion. It includes some great photographs taken by my father, who went to Japan as a missionary/aid worker in 1947.